Date of Award
Economics and Finance
The dissertation consists of two essays. In the first essay, we investigate the dynamics of analyst forecast errors relative to economic policy uncertainty (EPU) and find a significantly positive relation between EPU and analyst forecast errors. A doubling of EPU increases earnings forecast errors by 4.29 percentage points, and the volatility and dispersion in forecast errors are positively related to the EPU. This effect of EPU on forecast errors persists for 13 months with a gradually declining effect that is aligned with Oi–Hartman–Abel effect, a channel through which uncertainty can affect firms' financial activities, performance, and growth. Forecast errors are higher for firms with higher sensitivity to the EPU, and the uncertainty factor retains its significance when compared to other risk factors. Additionally, firms with higher idiosyncratic risks show a higher sensitivity to the economic policy uncertainty.
In the second essay, we investigate why a majority of unlevered firms do not pay dividends. Using a behavioral framework, we answer the puzzling but overlooked question: why so many zero-debt firms abstain from paying dividends. In this paper, we present how family ownership is linked to non-dividend-paying behavior of unlevered firms.
Biswas, Rumpa, "Two Essays in Finance: Effect of Economic Policy Uncertainty on Analyst Forecast Accuracy; Dividend Policies of Zero-Debt Firms – A Behavioral Explanation" (2022). University of New Orleans Theses and Dissertations. 3019.
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